When customers grew tired of high cable and satellite bills, streaming giants Netflix and Hulu entered the playing field.
When customers lamented their experiences with taxis, Uber and Lyft offered a new way to get around town.
And when customers saw that their financial institutions were not working with their best interests in mind, online bank accounts came onto the scene to offer more.
The best online checking accounts offer members lower fees (or sometimes even no fees) and higher interest rates than their traditional bank and credit union competitors. They also have responsive websites and advanced mobile apps to provide the same convenience of in-person banking on the go.
And despite what you might think about an account that is entirely online, they are incredibly safe. (Lack of safety is just one of many myths about online banks.)
All this makes online bank accounts highly appealing to savvy Penny Hoarders — or, in the case of online checking accounts, savvy penny spenders.
What to Look for in an Online Checking Account
If you keep your cash in a traditional bank or credit union but are drawn to the convenience and higher returns of an online checking account, consider several important factors:
- Annual percentage yield (APY): An annual percentage yield, according to Investopedia, is “the effective annual rate of return taking into account the effect of compounding interest.” If you are intrigued by complex math formulas, Investopedia even explains the calculation. But for those who, like me, shudder at the thought of high school math, here’s the easier thing to remember: The higher the APY, the more money you earn.
- Minimum balance: The best online checking accounts typically require no minimum balance — or a reasonably low balance. Some banks may require minimum balances to achieve certain benefits, like a higher APY or ATM fee reimbursements.
- ATM fees: Speaking of ATMs, look for an online checking account with a large network of fee-free ATMs nationally, or even globally. A truly good checking account should even reimburse you for fees other ATMs outside of the network may charge you.
- Monthly fees: Make free checking accounts a top criterion when selecting an online bank account; this is often a key differentiator from checking accounts at traditional banks. If an online bank includes “monthly maintenance fee” in its fine print, take your money elsewhere.
- Foreign transaction fees: If you travel out of the country frequently, find an online checking account with a debit card that does not charge you a fee to use an ATM or make a transaction abroad. However, this may not be the most important criterion, as many savvy online bank members also have travel rewards credit cards that are fee-free globally.
- Overdraft fees: Everybody makes mistakes. Don’t let your online bank punish you for it. Find an online checking account that will not charge you an overdraft fee if you accidentally overspend.
Downsides of Online Checking Accounts
Even the best free online checking accounts have their disadvantages.
The biggest downside: Many online banks do not contract with ATMs, so depositing cash can be difficult. Even those of us who live by the plastic in our wallets may sometimes need to deposit cash, like if Grandma gives you $100 for your birthday or you wait tables and amass a fair amount in cash tips each week.
If you don’t feel comfortable walking around with a wad of dollar bills in your pocket, you can purchase a money order for as little as $1 and then deposit the money order electronically. Or, if you have a friend who is willing to help, you can pay the friend with the cash and have them write you a check or Venmo you the equivalent, which you can then deposit into your online checking account.
Other drawbacks include a lack of cashier’s checks (you may have to order one and wait a few days for it to arrive) and a lack of in-person service. When I am stressed about my finances or troubled by activity I see in my account, I find it satisfying to go into one of my credit union’s physical branch locations to get assistance. But if you think you can keep your cool while getting help over the phone or online, this shouldn’t be a problem.
The Best Online Checking Accounts of 2019, Ranked
Aileen Perilla/ The Penny Hoarder
If the pros of online banking far outweigh the cons for your personal needs, spend some time researching online checking accounts available in 2019. Remember: Not all online banks are created equal.
To determine my top 9 list, I researched 20 of the most popular online checking accounts and compared key elements, including APYs, minimum account balances, ATM fees, monthly fees, foreign transaction fees and overdraft fees.
Based on these factors, I ranked them by best features overall. While the 11 other popular accounts I researched had merits, I couldn’t justify choosing any of them over the nine listed here.
My most crucial advice during your pursuit: Always read the fine print before signing up for an account.
1. Aspiration Spend & Save
The Aspiration Spend and Save account is my favorite because of its blend of favorable APY, unlimited ATM reimbursement and charitable mission.
APY: Its Save account offers an APY of 2.00% as long you deposit just $1 a month..
Minimum balance requirement: You’ll need $10 to open the account, but there’s no minimum balance.
ATM fees: The account also gives you access to every ATM on the planet. ATMs in-network are free, and Aspiration will reimburse you the fees for out-of-network ATMs monthly..
Monthly fees: Aspiration works on a pay-what-is-fair model. You choose to set a monthly tip up to $10 or as low as $0, and you can change it anytime.
Foreign transaction fees: None.*
Overdraft fees: None.
Details: Aspiration Spend & Save account
Notes: One other cool thing about Aspiration Summit: It commits to donating 10% of its earnings to charities that help Americans successfully start their own businesses. As a freelancer and a boyfriend to someone who owns and operates a small business, this definitely resonates with me.
2. nbkc bank
The National Bank of Kansas City, more popularly known as nbkc, isn’t just for Kansans — and with its high APY, lack of fees and easy ATM access, that’s a good thing for those of us living outside the state.
APY: 1.01%, no matter the balance.
Minimum balance requirement: You’ll need $5 to open the account, but no minimum balance is required.
ATM fees: Members get fee-free access to more than 32,000 MoneyPass ATMs. If you can’t find one near you, you can withdraw from other ATMs and receive up to $12 per month in ATM fee reimbursements.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: No overdraft fees. The only two conceivable fees you might incur with nkbc are for sending a domestic wire in the U.S. ($5) and sending or receiving an international wire ($45).
Details: National Bank of Kansas City
3. Axos Rewards Checking
Formerly known as Bank of Internet, Axos Bank offers a great online checking account with the potential to earn up to 1.25% APY.
APY: You have the potential to earn a 1.25% APY, assuming you fulfill three conditions each month (each worth 0.4166% APY):
- Receive at least one direct deposit of $1,000 or more.
- Use your debit card 10 times per month.
- Use your debit card 15 times per month.
So if you receive one direct deposit from your employer each month and use your debit card 10 times, you will receive two-thirds of the available APY (0.8332%). Five more swipes of the debit card would earn you the full 1.25% APY. Note: Only transactions of $3 or more apply.
Minimum balance requirement: None.
ATM fees: Unlimited ATM fee reimbursements, none outside the U.S.
Monthly fees: None.
Foreign transaction fees: Yes, 1% of each transaction.
Overdraft fees: None.
Details: Axos Rewards checking account
Notes: Replacement debit cards cost $10 (or $50 for rush delivery), so hold on tight to your wallet.
4. Charles Schwab High Yield Investor Checking
Travelers will love the Charles Schwab High Yield Investor Checking account, thanks to its universal ATM fee reimbursements.
APY: 0.4%
Minimum balance requirement: When you open a checking account with Charles Schwab, you must also open a Schwab brokerage account, but don’t worry: It also has no minimum balance requirement.
ATM fees: Universal ATM fee reimbursements.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: You may want to keep something in the brokerage account, because Charles Schwab doesn’t charge overdraft fees if the funds are available in the linked account.
Details: Charles Schwab High Yield Investor Checking account
5. Ally Interest Checking Account
Ally Bank offers both checking and savings accounts that are worth your consideration, especially with easy ATM access and lack of monthly fees.
APY: This online checking account offers a 0.6% APY on balances over $15,000. For balances less than $15,000, Ally offers a 0.1% APY. The available linked savings account, however, pays out 2% APY, so it makes more sense to keep your money there.
Minimum balance requirement: None
ATM fees: Offers U.S.-based ATM reimbursements up to $10 and all U.S. Allpoint ATMs are free. However, Ally’s checking account does fail travelers. There are no ATM fee reimbursements outside the U.S. and foreign transaction fees total 1% of the transaction.
Monthly fees: None.
Foreign transaction fees: Yes, 1% of each transaction.
Overdraft fees: None
Details: Ally Interest checking account
6. Simple Checking Account
The biggest reason I love this checking account: Simple’s APY is incredibly high as long as you meet the requirements of its Protected Goals Account.
APY: Every Simple checking account comes with a linked Protected Goals Account (essentially, a savings account), and there are unlimited transfers between the two. And Simple provides a good incentive to keep $2,000 in that Protected Goals Account: doing so earns you a 2.02% APY.
Minimum balance requirement: None.
ATM fees: Access to more than 40,000 fee-free ATMs, though you may incur fees for out-of-network ATMs.
Monthly fees: None.
Foreign transaction fees: Yes, 1% of each transaction.
Overdraft fees: None.
Details: Simple checking account
If you do take the card traveling (though again, I recommend a foreign transaction fee-free credit card), be sure to give Simple a heads up via a travel notice. They’ll award you a daily international transaction limit of $1,000, though you can have it temporarily bumped to $6,000.
7. Chime Spending Account
Chime is unique in that it earns very little interest but still has plenty of benefits to merit a spot on this list, including cool savings tools for young savers, easy access to ATMs and early access to paychecks.
APY: The checking account does not earn interest. And the associated savings account that comes with every Chime checking account earns just 0.01% APY.
Minimum balance requirement: None.
ATM fees: 38,000 fee-free ATMs in the U.S. and offers unlimited ATM fee reimbursements, because Chime wants you to use its debit card. (That’s how it makes money: through the businesses you’re using it at.) ATM withdrawals are limited to $500 per day, however, and cards come with a daily spending limit of $2,500.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: None.
Details: Chime Spending Account
Notes: What makes Chime unique is how it helps users build up their savings. Chime can automatically transfer 10% of any direct deposit into the savings account. Even more helpful is the automatic rounding tool. If you buy an iced coffee for $3.14, Chime rounds the charge up to $4 and puts the extra $0.86 into your savings account. You can turn off both features at any time.
One final cool feature: Chime can get you access to your paycheck via direct deposit up to two days ahead of payday.
8. Consumers Credit Union Free Rewards Checking
If you have your sights set on the highest APY possible, go with Consumers Credit Union. Just be ready to meet some strict criteria first.
APY: This bank offers the best APY on this list. But you’ll have to meet a lot of conditions to earn the full 5.09%. First, you have to pay $5 to open the account, though no minimum balance is required.
To earn 3.09% APY on balances up to $10,000 and unlimited ATM fee reimbursement, you need to do four things:
- Use the debit card at least 12 times per month (and run it as credit rather than debit).
- Have at least one direct deposit or ACH debit to your account or pay a bill online.
- Log in to the online account at least once per month.
- Receive all your paperwork digitally (instead of by mail).
To bump the APY up to 4.09% on balances up to $15,000, you’ll have to open a Visa credit card with the credit union and spend at least $500 per month with it. And to earn the full 5.09% on balances up to $20,000, you’ll need to spend $1,000 with the credit card.
In short, you need to be a power user to earn the fantastic APY. Otherwise, the APY is just 0.1%.
Minimum balance requirement:
ATM fees: None, with unlimited ATM fee reimbursement.
Monthly fees: None.
Foreign transaction fees: Yes, 1% of each transaction.
Overdraft fees: $30 for every overdraft. You can link the account to a savings account and get overdraft protection, which will cost $10 per transfer.
Details: Consumers Credit Union Free Rewards checking account
Notes: One small highlight for the Consumers Credit Union: There are 10 physical locations in the Chicago area and 1,800 shared branches nationwide, should you have a need for in-person help.
9. Capital One 360
Capital One 360’s checking account is not the strongest, but its potentially high APY, its access to ATMs and its lack of foreign transaction fees are its saving grace.
APY: The appealing 1% APY is only for balances of $100,000 or more. For balances of $50,000 or more, you’ll get 0.75% APY. But because only 11% of Americans have more than $25,000 in the bank, according to WalletHub, most members would have to settle for the 0.2% APY awarded to balances under $50,000.
Minimum balance requirement: None.
ATM fees: 39,000 Capital One and Allpoint fee-free ATMs, and there is no fee reimbursement for out-of-network ATMs.
Monthly fees: None.
Foreign transaction fees: None.
Overdraft fees: 13.25%
Details: Capital One 360 checking account
Table: Best Online Checking Accounts of 2019
| Online Checking Account | APY | Minimum Account Balance | ATM Fees | Monthly Fees | Foreign Transaction Fees | Overdraft Fees | Notes |
|---|---|---|---|---|---|---|---|
| Aspiration Summit | 1% | None | None; unlimited ATM fee reimbursement | None | None | None | APY of 1.00% is for balances of $2,500 or more. |
| nbkc bank | 1.01% | None | None at 32,000 Moneypass fee-free ATMs; reimburses up to $12/month in ATM fees | None | None | None | Costs $5 to open account. |
| Axos Rewards Checking | 1.25% | None | None; unlimited ATM fee reimbursement in U.S. | None | Yes, 1% of transaction | None | APY is based on account activity. |
| Charles Schwab High Yield Checking | 0.4% | None | None; unlimited ATM fee reimbursement | None | None | None | Linked with Schwab brokerage account. |
| Ally Interest Checking Account | 0.6% or 0.1% | None | None; reimburses up to $10/month in ATM fees in U.S. | None | Yes, 1% of transaction | None; free overdraft protection | Can link savings account (which pays 2% APY); APY of 0.6% is for balances over $15,000. |
| Simple Checking Account | 2.02% | $2,000 in Protected Goals Account | None at 40,000 fee-free ATMs; no ATM fee reimbursement | None | Yes, 1% of transaction | None | APY requires $2,000 in Protected Goals Account. |
| Chime | None | None | None at 38,000 fee-free locations in U.S. | None | None | None | Get paid up to two days early with direct deposit. |
| Consumers Credit Union Free Rewards Checking | 5.09% | None | None; unlimited ATM fee reimbursement | None | Yes, 1% of transaction | Yes, $30 per overdraft | APY and ATM reimbursement are linked to a lot of conditions that must be met. |
| Capital One 360 | 0.2% to 1% | None | None at 39,000 Capital One and Allpoint ATMs; no ATM fee reimbursement | None | None | Yes, 13.5% of amount | APY of 1.00% is for balances of $100,000 or more. |
Tips for Choosing the Best Online Checking Account
Still not sure which online checking account to choose? Here are a few tips that might help.
Think About Your Needs
Most online checking accounts — especially the ones on my top 9 list — offer some combination of good perks, though they might be missing out on others. Ultimately, you have to decide which benefits are more important to you.
Are you looking at your checking account as a small but smart investment strategy? Go with an account with a higher APY. Do you regularly rely on cash when traveling? Look for an online bank without ATM fees and that reimburses you out of network.
Maintain More Than One Account
You don’t have to have all your accounts through the same financial institution. You can start a savings account at a local credit union, sign up for an online checking account for the high APY and easy access to ATMs and utilize a national brick-and-mortar bank for your car loan.
Many of those traditional banks and credit unions also offer their own online bank accounts for a “hybrid solution” that gives you in-person access to assistance and that still offers the benefits of an online account.
Know What You’re Signing
Before signing with an online checking account — or any account with any financial institution — read the fine print. Closely.
APYs that sound too good to be true may only apply for a set amount of time or under set conditions; ordering checks in the mail or wiring money may cost an unexpected fee; and foreign transactions may be free, but foreign ATMs may include a fee.
Reading the fine print may also help you discover other benefits (like no wire fees) that may be important to you but that are not commonly advertised.
*Aspiration Partners, Inc. and its affiliates are committed to “All Extra Services Provided at Cost,” meaning that it’ll only charge you what it costs them to provide the extra service (such as a wire transfer), and not a penny more. Besides these at-cost service charges, the only account fee you pay is the fee you choose, even if it’s $0, which is why it’s called Pay What Is Fair.
Timothy Moore is a market research editor and freelance writer covering topics on personal finance, careers, education, pet care and automotive. He has worked in the field since 2012 and has been featured on sites like The Penny Hoarder, Debt.com, Ladders, Glassdoor and The News Wheel.